Altcoin indicator begin to see signs of life
Despite market pullbacks, we are still seeing some resilience
Here are 5 factors you need to know with 2000 blocks to halving 👇🧵
Macro Pulse Update 07.04.2024, covering the following topics:
1️⃣ Macro events for the week
2️⃣ Bitcoin Buzz Indicator
3️⃣ Market overview
4️⃣ Key Economic Metrics
5️⃣ China Spotlight
1️⃣ Macro events for the week
Last week
Next Week
2️⃣ Bitcoin Buzz Indicator
Crypto Market and Platform Updates
Ethena Labs Amplifies Synthetic Dollar
Scammers Pounce on Wormhole Airdrop
Solana Battles Bot-Induced Failures
Ripple Launches New Stablecoin
Regulatory and Security Insights
Tether Bolsters Bitcoin Portfolio
Ethereum's EigenLayer: Innovation Meets Risk
Investments and Venture Capital
a16z's $75 Million Web3 Gaming Push
Blockchain Technology and Layer 3 Developments
Layer 3's Degen Chain: Controversy and Growth
NFTs and Digital Collectibles
OpenSea Champions NFT Royalties with ERC-721C
Doodles' Animated Leap with Star Power
Binance Withdraws from Bitcoin NFTs
Nuddies NFT Scandal: A CTO's Betrayal
Altcoins
TRON sought dismissal of an SEC lawsuit, citing overseas transactions and regulatory ambiguity.
Bitkub, a Thai crypto exchange, planned a 2025 IPO, according to Bloomberg.
OpenLeverage faced multiple hacks, resulting in a $230K loss, reports indicated.
Telegram launched Toncoin payments for ads, sharing revenue with channel owners.
The Chinese government introduced a public blockchain infrastructure platform in collaboration with Conflux Network.
Crypto funds worth $336.3 million were stolen in Q1, with $98.8 million recovered from March hacks, PeckShield reported.
FTX bankruptcy estate aimed for a repayment target by the end of 2024.
Crypto.com pursued expansion in South Korea amidst growing regulatory scrutiny.
BNB Chain offered a $1M reward to attract memecoin developers.
Binance defended a detained executive amid ongoing talks with Nigeria.
Arbitrum, Aptos, and Starknet were set for over $600 million in token unlocks this month.
IoTeX secured a $50M investment to expand the dePIN narrative for the next cycle.
KuCoin’s market share halved after DOJ and CTFC charges.
Galaxy Digital planned to raise $100M for a new fund.
Coinbase's Canadian license established it as the country's largest registered crypto exchange.
The Philippines SEC accused eToro of offering unregistered securities.
Starknet detailed reasons for a 4-hour block outage.
Montenegro’s Supreme Court sent Do Kwon’s extradition case to a lower court.
Grayscale removed Cardano from its Large Cap Fund.
3️⃣ Market overview
Bitcoin (BTC) hitting a new all-time high price, Ethereum (ETH) showing resilience after a market sell-off, MicroStrategy raising funds to acquire more BTC, the return of memecoin mania, and the Federal Reserve Chair's comments on potential interest rate cuts.
BTC Reaches New ATH: BTC hit a new all-time high of $69,324 this week, breaking the previous record from November 2021. This marks the first time BTC has set a new high before an upcoming halving event, suggesting a potential shift in market conditions and investment patterns.
Market Correction and Funding Rates: After the new highs, profit-taking and liquidations led to a sharp correction, with BTC dropping below $60K. However, a decrease in funding rates suggests a market reset, potentially opening the door for more sustainable price appreciation.
ETH Resilience and Dencun Upgrade: ETH showed resilience after the market sell-off, rallying to surpass its recent high. The anticipated Dencun upgrade, aimed at improving scalability, has contributed to ETH's positive momentum.
MicroStrategy Raising Funds for BTC Acquisition: MicroStrategy, a major BTC accumulator, announced plans to raise $600 million to acquire more BTC, reinforcing its commitment to the cryptocurrency.
Memecoin Mania Returns: The return of memecoin mania, with multiple memecoins experiencing triple-digit percentage gains, may suggest a potential return of retail investors and a broadening of market participants.
Interest Rate Cuts Likely in 2024: Federal Reserve Chair Jerome Powell indicated that interest rate cuts are likely "at some point" in 2024, although policymakers remain vigilant about inflation risks.
4️⃣ Key Economic Metrics
🔴 Rates Cuts Not so Soon
While headline inflation re-accelerated slightly, underlying inflation pressures continued decelerating, backed by easing goods inflation and expected declines in housing costs flowing through to core inflation measures. The solid real spending growth supports continued economic momentum.
Fed's Outlook
Fed Chair Powell said the February inflation data was "in line" with expectations.
He pushed back against calls for overtightening or prematurely cutting rates.
With the labor market strong and inflation gradually decelerating, the Fed can take time on its next policy move.
Components Breakdown
Goods inflation is easing - durable goods prices down 2% and non-durable goods up just 0.8% year-over-year.
Services inflation remains elevated at 3.8% due to the tight labor market and rising wages.
Housing/shelter costs, which lag overall inflation, are expected to decelerate in coming months as well.
Income, Spending and Implications
Real disposable incomes dipped 0.1% in February due to higher tax payments offsetting wage gains.
The savings rate fell as consumers dipped into savings to maintain spending growth of 0.4%.
The solid real spending growth of 0.4%, led by durables, bodes well for Q1 GDP given consumer spending is 70% of GDP.
🔴 Bank of Japan Raises Rates, Yen Depreciates
The Bank of Japan recently raised interest rates and ended its yield curve control policy, which was expected to boost the yen's value.
However, the yen depreciated against the US dollar after the rate hike, surprising many.
Potential reasons include:
Expectations of higher US interest rates given economic strength, supporting the dollar.
Fears of US protectionism if a stronger yen boosts Japanese exports.
Concerns that BOJ signaled policy remains accommodative, confusing markets.
A weak yen can add to Japan's inflationary pressures from higher import costs.
🟢 Eurozone Inflation Easing
Preliminary data from France and Italy suggest eurozone inflation is receding quickly.
In France, annual core inflation hit the lowest since March 2022 at 2.7%.
In Italy, core inflation was 2.3%, also the lowest in over a year.
However, persistent services inflation remains a concern for the ECB.
🟢 German Economic Headwinds
Leading German economic institutes cut the 2024 GDP growth forecast to just 0.1%.
Factors weighing on growth include weaker domestic demand, loss of competitiveness, and higher energy prices hurting exports.
Reforms are recommended to boost productivity, transition the energy mix, and shift towards an information economy.
Immigration of skilled workers and more investment in R&D could also support long-term growth prospects.
5️⃣ China Spotlight🔴
While moving into higher value-added exports is a goal, China may face significant trade frictions if seen as flooding world markets. An alternate path of boosting still-low domestic consumption could be more viable for sustainable growth.
Shift Away from Investment-Led Growth
For decades, a disproportionate share of China's growth came from investment in property and infrastructure
However, this led to issues like excess debt and overcapacity
China is now trying to transition away from this investment-heavy model
Focus on Exports of Advanced Technologies
Instead of rebalancing towards more consumer-led growth, China's new strategy aims to boost exports of high-tech, high value-added products like EVs, semiconductors, AI, and biotech
The goal is to move into advanced technology manufacturing and exports
Potential Obstacles
Export Barriers - As a major exporter already, ramping up advanced tech exports could be viewed as "dumping" by trade partners like the US/EU, prompting protectionist barriers
Rivalries in Tech - Advanced economies also want to build domestic high-tech capabilities and may see China as a rival, not just a supplier
Overcapacity Risk - If China cannot successfully export more advanced tech products, it could again face issues of overcapacity
Consumption Remains Low
Household consumption in China is still below 40% of GDP, which is abnormally low compared to peers
Many economists argue boosting consumption should be prioritized to improve living standards and economic rebalancing
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